White House Trade Politics May Backfire

By , Kevin G. Nealer is a fellow of the Georgetown University Center for International Business and Trade.

TRADE policy has no ballot box bounce - at least at the level of national retail politics. That seems to be the conventional wisdom of the past decade. The Harris Wofford win in Pennsylvania and the shoot-out in a special election in the Texas First District in 1985 affirmed that local politics can use protectionist sentiment. But national campaigns run on test-driven appeals. When it comes to trade and protectionism, the polls show that voter sentiment is muddled.

The Bush campaign wants to challenge that thinking. In the past several weeks, the president's campaign against Gov. Bill Clinton has featured attacks alleging that Democrats - especially the challenger - do not fully support the North American Free Trade Agreement (NAFTA). Republicans hope to offer NAFTA as the litmus test for job-creating trade growth.

One of the few bright spots in the Bush economy has been increased exports. The political use of NAFTA seems calculated to highlight that good news while painting Mr. Clinton as indecisive on a major international issue. It has been characterized as an "offensive" use of trade politics - challenging an opponent to support trade liberalization rather than import restrictions.

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The strategy may be more offensive than George Bush intends. US Trade Representative Carla Hills met tough criticism when she violated her promise to Congress and presented the incomplete trade agreement, timed to allow the Bush campaign to declare victory on NAFTA near the Republican convention. Congressional leaders like Finance Committee Chairman Lloyd Bentsen (D) of Texas were among the earliest supporters of NAFTA. Senator Bentsen and his colleagues were openly bitter about the Bush campaign tactic,

and warned it could undermine a fragile coalition favoring the agreement. If Mr. Bush wins, he has diminished congressional good will on behalf of NAFTA in the committees most invested in its success.

Worse yet from the Bush campaign point of view, the charges now look wide of the mark. Clinton supported "fast track" for NAFTA more than a year ago, and has not renounced that position. Bush first charged Clinton with waffling on NAFTA before the text was made public, which gave Clinton and other Democrats the chance to ridicule Bush, saying they do not sign what they have not read. A Clinton "flip-flop" on NAFTA did not materialize. Instead, he affirmed his support for the agreement, but called for app ropriate transition features. He has limited his criticism to aspects of the workers' adjustment program and environmental safeguards.

Both of those areas are addressed in side agreements and not included in NAFTA. Clinton's questions about the adequacy of these labor and "green" protections seem to have found resonance in key Midwestern states where doubts about both issues undermine support for the agreement. It may be the ultimate irony that Clinton's cautious support for the core trade policies of NAFTA market opening could allow him to address its shortcomings and satisfy congressional critics who have been chastened by Bush politi cal attacks. By contrast, a second Bush term would begin with considerable fence-mending aimed at reestablishing a working relationship with Congress on this issue.

Attacks on Clinton's trade credentials come as the Bush trade team is engaged in a desperate push to finish a trade deal before the election. Bush has repeatedly identified conclusion of the multilateral GATT talks as the central goal of his international economic policy. His advisers have pointed out that a GATT deal would put $17,000 into the pockets of the average American family of four - more than any tax-reform scheme yet advanced. If the media and the Clinton crowd start to measure the success of Bush trade policy with the president's own yardstick, his administration may come up short.

The president values his personal relations with European leaders; but four economic summits have failed to move GATT past European intransigence on farm trade. Even White House officials complain that Bush has been unable to cut a deal that - by his own admission - is vital to maintaining free-trade momentum.

Either a Bush or Clinton presidency will face the challenge of concluding both GATT and NAFTA before the expiration of congressional "fast track" negotiating authority by the end of May 1993. That gives a new Congress and administration precious little time after the government begins its work next February. Along with the need for prompt action on these agreements, a new president must deal with expiration of trade preference for developed countries, trade law reform efforts, and congressional pressure to renew the "Super 301" legislation that provides for retaliation against foreign-market barriers.

If Bush returns, expect a contentious year for trade policy, with many vetoes and deadlocks. By contrast, a Clinton administration would be expected to develop new trade policies, instead of more trade politics. The president complains that divided government frustrates his policies. It may be a Clinton administration and Democratic Congress are the best bet for keeping free trade moving forward.

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